Singh Weakened as Largest Ally Quits India Ruling Coalition

By Bibhudatta Pradhan and Andrew MacAskill -
Mar 19, 2013

The largest ally in Indian Prime
Minister Manmohan Singh’s coalition withdrew support over the
government’s approach to alleged war crimes in Sri Lanka, while
signaling that a patch-up was possible if its demands were met.

The permanent exit of the Dravida Munnetra Kazhagam, one of
nine parliamentary partners in the ruling alliance, would
undermine the government before a general election scheduled for
next year, leaving it even more reliant on the support of fickle
regional parties to pass legislation.

The ally’s threat comes as Singh battles to refocus the
government ahead of the 2014 poll, end two years of criticism
over alleged corruption and repair a slowing economy. The
benchmark S&P BSE Sensex (SENSEX) share index fell 1 percent at 1:55 p.m.
in Mumbai, the most in three weeks. The rupee weakened as much
as 0.4 percent against the dollar before paring losses.

“This is a serious threat but there are talks going on
behind the scenes and the government may be able to take care of
their concerns,” said Satish Misra, an analyst at the Observer
Research Foundation, a policy group based in New Delhi. “If the
DMK pulls out, then the government is going to be severely
weakened.”

The standoff in India comes as the United Nations Human
Rights Council prepares to vote in Geneva on a U.S.-sponsored
resolution calling on Sri Lanka to fully investigate alleged war
crimes by its troops during the bloody final few weeks of the
conflict with Liberation Tigers of Tamil Eelam guerrillas. The
southern state of Tamil Nadu, where the DMK is based, shares
cultural and religious links with Sri Lankan Tamils.

Top Envoys

DMK party leader Muthuvel Karunanidhi is demanding that the
government pass a parliamentary resolution condemning Sri Lanka.
Congress leader Sonia Gandhi dispatched her top three ministers,
including Finance Minister Palaniappan Chidambaram and Defense
Minister A.K. Antony, to hold talks with Karunanidhi in Chennai
yesterday evening.

Sri Lanka’s military and Tamil Tiger fighters probably
committed serious violations of international law in the final
stages of their conflict, resulting in as many as 40,000
civilian deaths, a UN report released in April 2011 said.

A documentary shown at a meeting of the UN council this
month included images of the bullet-riddled body of a child its
makers identified as the 12-year-old son of slain Tamil Tiger
guerrilla leader Velupillai Prabhakaran. The film shows pictures
it says were taken with the same camera of the boy eating a
biscuit in the custody of Sri Lankan soldiers and later shot
dead.

Minority Government

Sri Lanka’s government denies the alleged atrocities in
2009 and has branded calls for an inquiry as meddling by the
international community. While India supported a similar
resolution at last year’s UN council meeting, it is yet to make
its intentions clear ahead of this week’s expected vote.

The DMK has 18 lawmakers in the 545-member lower house of
parliament in New Delhi. Without its support, Singh’s ruling
alliance would be 44 seats short of a majority. It already needs
the backing of groups like the Samajwadi Party and the
Mayawati’s Bahujan Samaj Party, which compete for power in the
country’s most populous state, Uttar Pradesh.

Karunanidhi has threatened to pull out of the government
before as he fought with Singh’s Congress party over how to
contest a state election. He also pressured the prime minister
ahead of last year’s UN vote.

Relations between the Congress and its southern ally have
been strained since former telecommunications minister Andimuthu Raja, a member of the DMK, was arrested in 2011 in a federal
probe into the 2008 sale of mobile-phone licenses.

‘Big Risk’

Karunanidhi’s daughter and parliamentary lawmaker Kanimozhi
is also among those on trial for colluding to sell spectrum to
unqualified companies for personal benefit.

“There’s going to be a lot of political uncertainty
because of this now,” said Sonal Varma, an economist with
Nomura Holdings Inc. in Mumbai. “It highlights how politics is
still a big risk in India, particularly given this is a pre-
election year.”

Speaking to reporters today after the DMK announcement,
Chidambaram said the government had last night received the
latest draft of the U.S. resolution and was studying it to see
if it needed to be toughened.

Karunanidhi’s “statement deserves all respect and we have
taken note of it,” Chidambaram told reporters in New Delhi
today. “The stability of the government and the continuance of
the government are not an issue.”

Regarding the DMK’s call for a parliamentary resolution
condemning Sri Lanka, the government had begun consultations
with all parties, Chidambaram said. The finance minister noted
that Karunanidhi had said he could reverse his decision.